Manufacturing stats show lift in December

March 8 (BusinessDesk) - A lift
in the volume and value of New Zealand manufacturing sales
in the fourth quarter of 2017 helped solidify economists'
views for a solid reading in next week's gross domestic
product figures.

The volume of all manufacturing sales
rose a seasonally adjusted 1 percent in the three months to
Dec. 31 while the value increased 2.8 percent, Statistics
New Zealand said. Seven of the 13 manufacturing industries
reported increases in the December 2017 quarter.

"It was
broadly in line with our expectations and doesn't alter our
view on the GDP outlook for the quarter," said ANZ Bank New
Zealand senior economist Phil Borkin. "Overall, the
manufacturing sector is chugging along."

ANZ is expecting
next week's figures to show the economy expanded 0.7 percent
in the quarter. Gross domestic product figures are due March
15.

The
Stats NZ survey showed the value of petroleum and coal
product manufacturing rose 23 percent and volumes rose 17
percent. Petroleum and coal product manufacturing does not
have stable seasonality so is not seasonally adjusted.

"The December 2017 quarter's rise in petroleum and coal
product manufacturing follows falls in the June and
September quarters," Stats NZ manufacturing manager Sue
Chapman said. "This is the largest percentage rise since
December 2008, and the third-largest since the series
began."

Stats NZ noted it was not unusual for this
industry to show large movements from quarter to quarter.
The predominant activities in the industry include
automotive fuel manufacturing, aviation fuel manufacturing,
oil manufacturing, and petroleum refining and
blending.

Meat and dairy product manufacturing, which
accounts for almost a quarter of production, reported a 2.8
percent decline in sales volumes in the quarter, while sales
values lifted 3.9 percent. On an unadjusted basis, sales
volumes rose 38 percent from the prior quarter while values
jumped 45 percent.

ANZ's Borkin said the decline was not a
surprise as dry weather in the quarter hampered milk
production.

The actual volume of total manufacturing
sales was up 1.4 percent from the previous December quarter.
When price changes are included, the value of manufacturing
sales was $29.6 billion in the December 2017 quarter, up
$2.7 billion from the December 2016
quarter.

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